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Credit Scoring

by Acceptance Finance

(Archived)
Tuesday, August 25th 2009, 16:14 GMT+10:00
Australia

How Can You Ensure Your Credit Rating?

Lenders, such as banks and credit card companies, are using credit scores to evaluate the potential risk posted by lending money to consumers and to mitigate losses due to bad debt. Lenders use credit scores to determine who qualifies for a loan, at what interest rate and what credit limits should apply. The use of credit or identity scoring prior to authorizing access or granting credit is an implementation of a preferred banking system.

Credit scoring is not limited to banks. Other organisations, such as mobile phone companies, insurance companies, employers, landlords and government departments employ the same techniques.

In the current environment, a declined credit score result can severely affect your chances of obtaining the finance you are seeking.

Two years ago, it would have been rare for a customer’s application for finance to have been rejected solely on the basis that you failed credit score. Although many clients’ initial applications were ‘system declined’, we were able to have this system-generated decision regularly overridden (where there were aspects of a client’s application that warranted this).

Here are some legitimate fundamental steps that you can take to help maximize your credit score.

• Provide licence number when you have one
   
• Show all addresses for period required (2 years or 3 years)
   
• Show all employment details for required period including address, phone numbers etc
   
• Show bank account details (even if there is not much money in them as this can affect credit score if not listed)
   
• List all phone numbers even if you are not home during the day
   
• Include all assets including super, shares and voluntary super.

Excessive enquiries on a credit report can also affect your scoring.

Although all this may sound simple, we try not to leave any area on an application blank as they are included for a reason which can affect the score.

In recent conversations that we have had with banks on this issue, the feedback has been very simple: “If we ask for the information on an application, provide it!”

If you have any queries regarding credit scoring please don’t hesitate to contact Joe Terlato on 9854 3550 or email jterlato@acceptancefinance.com.au

 

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